Summer is fast approaching and this time of year everyone’s schedule seems to get a little busier. This also means summer activities and extra expenses. The BASE® 125 Cafeteria Plan is something employees can use to save tax dollars in the summer months, and throughout the year to help with extra costs of summer.
Employers are able to customize benefits and save money with the BASE® 125 Cafeteria Plan. By simply sponsoring a BASE® 125 Cafeteria Plan, employers can allow employees who are paying medical expenses, insurance premiums, or dependent care expenses to do so on a pre-tax basis. Due to the flexibility of this benefit, employers can choose one or more of the following pre-tax options to offer participants:
- Flexible Spending Account (FSA)
- Limited Purpose FSA
- Dependent Care Assistance Plan (DCAP)
- Premium Only Plan (POP)
Employees can utilize a DCAP during the summer while their kids are at daycare and no longer in school. They can also utilize the FSA for qualifying out-of-pocket expenses that could include anything from co-payments, prescription drugs, over-the-counter medical supplies, and more. This includes prescription sunglasses and first aid kits for those summer days! By sponsoring an FSA, employers provide another means for employees to pay for out-of-pocket medical costs through an employee funded benefit plan.
Anne M. shared with BASE® why her company decided to implement a 125 Cafeteria Plan.
“The BASE® 125 Cafeteria Plan allows employees the flexibility of choosing how much pre-tax money they want to set aside per their needs. Not only can our staff have a way to pay their dental and vision, but they can also get reimbursement for childcare and some supplemental insurance pre-tax. Plus, our BASE® representative is prompt and very thorough in getting answers to me, as well as any of my staff. The BASE® staff is excellent on every level.”
Creative benefit planning can help keep more fun in the sun with the BASE®125 Cafeteria Plan. For more information, contact us today at 1-888-386-9680.
Continuously adapting and changing, we must take compliance rules and regulations as they come. It is important to understand just how important an ERISA Wrap document is in avoiding risk during this volatile time of unremitting ACA, IRS, and ERISA updates. Recent Department of Labor regulatory changes serve as a good reminder of how important it is for employers to arm themselves with wraparound compliance protection. All it takes is one random audit or employee complaint to cost an employer thousands in penalties for not having the proper plan documentation up-to-date. There is no question it pays to have an ERISA Wrap in place, and serves as a great reminder that the quicker employers get into compliance with an ERISA Wrap, the better.
Effective April 1, 2018, a new rule from the US Department of Labor (DOL) requires ERISA-covered employee benefit plans to re-issue plan documentation (ERISA Wrap documents) to all participants. While the rule is in effect, employers have 210 days to comply with this new ruling. Please note this change revolves around changes to claim processing requirements, which can be found in the Summary Plan Description and Plan Document that BASE® provides as part of important ERISA Wrap documentation that was updated on March 5, 2018.
The most notable changes to claim processing requirements include:
- Improvement to Basic Disclosure Requirements. Benefit denial notices must include a more complete discussion of why the plan denied a claim and the standards used in making the decision.
- Right to Internal Protocols. Benefit denial notices must include specific criteria of the plan that were used in denying a claim, or a statement that none were used.
- Access to Claims File. The Plan Administrator must inform participants, in benefit denial notices, that they are entitled to access all documents relevant to an adverse claim determination.
- Avoiding Conflicts of Interest. Plans must ensure that disability benefit claims and appeals are adjudicated in a way that ensures the independence and impartiality of individuals making the decision.
Without this updated documentation employers are at risk of not providing the amended claims procedures to their employee participants, which puts them at risk for $110 per-day per-employee penalty. BASE® reissues ERISA Wrap Documentation to all clients affected by regulatory changes, such as this, to keep steep penalties at bay.
But don’t just take our word for it; look at the case of Lee. ING Groep, N.V., 2016 WL 3974176 (9th Cir. July 25, 2016) which serves as a reminder of how a court can impose such penalties. In this case, a district court moved in favor of a former employee for an ERISA violation, which could have been avoided had the proper documentation been provided. While the case stemmed from a former employees challenge of the denial of benefits and the failure to follow claims procedures imposed on benefits plans, another ERISA violation was uncovered. In the end, the court granted summary judgement to the plaintiff and imposed a penalty of $27,475 for failure to produce a Plan Document in a timely manner. So while this case started because an employee was unhappy regarding the handling of claims, it proves that one complaint can lead to a DOL audit and put employers at risk for thousands of dollars in penalties.
This is just one example of how the BASE® ERISA Wrap keeps employers up-to-date and in compliance with the latest IRS and DOL rules and regulations as they become available. Not to mention the other ways that having an ERISA Wrap in place provides wraparound coverage, this includes important distribution guidelines along with our extensive ERISA Wrap compliance package.
BASE® provides the service and protection they deserve with the BASE® ERISA Wrap in place. Should you have any questions regarding these changes or want to learn more about the BASE® ERISA Wrap, please contact our office at 1-888-386-9680.
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